Mortgages are simple. They should be easy to acquire and should have a common-sense based application process. However, over the last decade, there have been numerous changes. The regulators have decreased our amortizations from 40 years to 35 to 30 and now 25 (for insured mortgages). They have curtailed and obstructed small business owners, entrepreneurs, commissioned sales people and even part-time employees. They have limited and restricted investors and landlords. They have even obstructed first time home buyers by reducing the amounts of approved mortgages by adding a stress test. They have even limited people from refinancing their houses to pay off debt or get out of tight financial situations by reducing refinance amounts from 95% to 90% and further to 80%. They did all of this in the spirit of protecting the Canadian Tax Payer from a US style crash. There has been over 10 years of fearmongering from national and local media outlets, politicians who have been elected seem to be clueless when it comes to matters of housing and mortgages. The banks are greedier than ever when it comes to protecting profits and slamming the little guy with high penalties and rates. The housing bubble, the foreign investors, debt to income ratios and all of the other blah, blah blah, seem to have been nothing but media hype.
Were all of the changes bad? No. Did these changes eliminate most of the common sense from the mortgage adjudication process? Yes. The best part of my job as a Mortgage Professional is that I get to help people. I help them buy their first home, repair bruised credit, help them a budget, downsize, improve cash flow, and introduce them to an amazing team of financial professionals. However, it is getting harder and harder to help when the common sense is disappearing.
Our professional association is working with lenders and government to ensure that the first time home buyer and entrepreneur are protected and that mortgage approval criterion are fair and just for everyone. Owning a home is the backbone of the Canadian dream and should be put within sights of every Canadian and not the most privileged.
We recommend contacting you MP and urge them to revisit mortgage qualification rules. Please encourage them to reach out to our industry and let them know the importance that home ownership has for Canadian’s financial health.
The sky hasn’t fallen, the mass paranoia isn’t warranted in my opinion and it should be the job of our government to ensure there are plenty of jobs and growth and not to limit the average Canadian and over-regulate industry.